Why doesn’t pay for performance work? It seems that by defining health outcomes and financially incentivizing physicians to meet those targets, we would see improved health. However, since the United Kingdom (UK) has implemented pay-for-performance incentives, the evidence that this change improves health status is negligible.
Researchers from the National Primary Care Research and Development Centre have been tracking health outcomes for asthma, diabetes, and coronary artery disease since implementing a pay-for-performance model in the UK. They found that health outcomes for asthma and diabetes improved, but only in the short run. In the long run, the rate of improvement leveled off. For heart disease, the results were even more disappointing as they did not even show improvement in the short run.
A study from the Department of Public Health Sciences, looking at intermediate outcomes of diabetes under pay-for-performance did not provide any better news. In fact, their results were not able to show a statistically significant difference in physicians’ ability to meet performance targets after rewarding physicians based off of performance.
The researchers also collected data from patients asking about perceptions of access to care, continuity of care, and the interpersonal aspects of care. The pay-for-performance method had no effect on any of these indicators either.
Performance based payment works in other fields, but for some reason it does not work in health care. This may point to the need to better define quality in health care, particularly in primary care. Maybe looking at HgA1c targets is fine on the individual level, but for population based diabetes control, this is not the answer? Perhaps, physicians are not incentivized by payment as much as economists would like us to believe? I am not sure what the problem is, but these results point us away from pay-for-performance as the silver bullet for improved quality in primary care.
Stephen Campbell, et al, "Effects of Pay for Performance on the Quality of Primary Care in England," The New England Journal of Medicine 2009; 361: 368-78
Stephen Campbell, et al, "Quality of Primary Care in England with the Introduction of Pay for Performance," The New England Journal of Medicine 2007; 357: 181-190
Pooja Vaghela et al, "Population Intermediate Outcomes of Diabetes Under Pay-for-Performance Incentives in England from 2004-2008" Diabetes Care 2009; vol 32, no. 3